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Q1 Earnings Outperformers: Five9 (NASDAQ:FIVN) And The Rest Of The Video Conferencing Stocks


Radek Strnad /
2022/07/13 4:34 am EDT
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Looking back on video conferencing stocks' Q1 earnings, we examine this quarter’s best and worst performers, including Five9 (NASDAQ:FIVN) and its peers.

Work is becoming more distributed, both across geographies and devices. In order for businesses to keep functioning efficiently, they need to be able to communicate as well as they did when the teams were co-located, which drives the demand for integrated communication platforms.

The 4 video conferencing stocks we track reported a mixed Q1; on average, revenues beat analyst consensus estimates by 2.25%, while on average next quarter revenue guidance was 1.03% above consensus. The technology sell-off has been putting pressure on stocks since November and while some of the video conferencing stocks have fared somewhat better, they have not been spared, with share price declining 12.8% since earnings, on average.

Five9 (NASDAQ:FIVN)

Started in 2001, Five9 (NASDAQ: FIVN) offers software as a service that makes it easier for companies to set up and efficiently run call centers, and offer more tailored customer support.

Five9 reported revenues of $182.8 million, up 32.5% year on year, beating analyst expectations by 6.96%. It was a strong quarter for the company, with a solid beat of analyst estimates.

“We are extremely pleased to report a strong start to the year with first quarter revenue growing 33% year-over-year to a record $182.8 million. This growth continues to be driven primarily by the strength of our Enterprise business where LTM subscription revenue grew 46% year-over-year as a result of our scalable, reliable and secure platform, our successful march up market, and our expanding global presence. Our platform can meet the needs of the largest companies in the world as demonstrated by our record customer win during the quarter with a healthcare conglomerate who is anticipated to roll out tens of thousands of seats with Five9.” said Rowan Trollope the CEO of Five9.

Five9 Total Revenue

Five9 achieved the strongest analyst estimates beat and highest full year guidance raise of the whole group. The stock is down 10.4% since the results and currently trades at $92.21.

Is now the time to buy Five9? Access our full analysis of the earnings results here, it's free.

Best Q1: 8x8 (NYSE:EGHT)

Founded in 1987, 8x8 (NYSE:EGHT) provides software for organizations to efficiently communicate and collaborate with their customers, employees, and partners.

8x8 reported revenues of $181.3 million, up 25.3% year on year, missing analyst expectations by 0.02%. It was a decent quarter for the company, with an increase in gross margin and accelerating growth in large customers.

8x8 Total Revenue

8x8 had the weakest performance against analyst estimates among its peers. The company added 413 enterprise customers paying more than $100,000 annually to a total of 1,320. The stock is down 36.4% since the results and currently trades at $4.90.

Is now the time to buy 8x8? Access our full analysis of the earnings results here, it's free.

Weakest Q1: RingCentral (NYSE:RNG)

Founded in 1999 during the dot-com era, RingCentral (NYSE:RNG) provides software as a service that unifies phone, text, fax, video calls and chat in one platform.

RingCentral reported revenues of $467.6 million, up 32.7% year on year, beating analyst expectations by 2.02%. It was a weaker quarter for the company, with a full year guidance missing analysts' expectations and a decline in gross margin.

RingCentral achieved the fastest revenue growth but had the weakest full year guidance update in the group. The stock is down 25.7% since the results and currently trades at $51.10.

Read our full analysis of RingCentral's results here.

Zoom Video (NASDAQ:ZM)

Started by Eric Yuan who once ran engineering for Cisco’s video conferencing business, Zoom (NASDAQ:ZM) offers an easy to use, cloud-based platform for video conferencing, audio conferencing and screen sharing.

Zoom Video reported revenues of $1.07 billion, up 12.2% year on year, in line with analyst expectations. Despite the stock rising on the results, it was a weaker quarter for the company, with a decline in net revenue retention rate and a slow revenue growth.

Zoom Video had the slowest revenue growth among the peers. The company added 191 enterprise customers paying more than $100,000 annually to a total of 2,916. The stock is up 21.3% since the results and currently trades at $108.37.

Read our full, actionable report on Zoom Video here, it's free.

The author has no position in any of the stocks mentioned